The Ukraine Is The Financial Waterloo Of The West. Russia Bets On Gold And Crypto. The West Destroys Itself While Seeking Whom It Might Devour

 By Stan Szymanski 

“Be sober, be vigilant; because your adversary the devil, as a roaring lion, walketh about, seeking whom he may devour:” (1 Peter‬ ‭5:8‬ ‭KJV‬‬)

As recounted in the 2015 film ‘The Big Short’, in 2008 (and a few years before that) people were buying houses with no money down and no job; there were literally -no- standards that they had to meet except to be able to breathe and sign the loan application. This malfeasance of oversight, business practice and the leverage thereof ultimately became a large part of the undoing of the world financial system in 2008.

Fast forward to our current era. In early 2020 the Federal Reserve disclosed …’As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020.  This action eliminated reserve requirements for all depository institutions.’…

So starting at that point just two years ago, the banks of the United States were now able to run their business without having to satisfy the long standing reserve requirement of maintaining 10% of their deposits. They could operate with no safety net (no reserve requirement)… So just as the banks relieved individuals of the burden of meeting any criteria in order to participate in the housing market in 2008, in our current era, the Federal Reserve has relieved the depository institutions under its umbrella of maintaining a buffer to make sure they …‘possess enough liquidity for withdrawals and obligations and for withstanding the impact of unforeseen market conditions.’…

In other words in 2022 it is 2008 all over again, but worse. In 2008 it was the mortgage business that was allowed act like drunken privileged teenagers who had their rich parents to bail them out via TAARP. In 2008 there was at least a reserve requirement in place to not stop the financial crisis, but it at least played a part in the mitigation of the emergency (some banks needed the money and some did not even though they took it). In 2022 there is no reserve requirement for the banks. So when things go (are going) wrong where is the provision (reserve) for ‘withstanding the impact of unseen market conditions’?

In 1929 margin requirements to buy stock were 10%; in other words $100 bought $1,000 of stock-great when stocks are going up and catastrophic on the way down. That’s why in modern times the margin requirements have typically been 50%. When moral constraints are removed from a market (like the Fed removing the banks’ reserve requirement) the outcome cannot be beneficial to the public. The US financial system is destroying itself.

Once again according to Corporate Finance Institute…’A lower reserve ratio means that banks hold more capital available for lending. It would imply an increase in the money supply in an economy.’ …

So the Fed lowered the reserve requirement in 2020. That tells you that they were and now, still are, trying to stimulate the economy. In 2022 they are stimulating the economy so much that we now have a high inflation rate of officially over 7% and according to John Williams at ShadowStats inflation is really 15%.

So now we have a crappy economy, high inflation as the Fed purposefully floods the system with money and a banking system unable to handle any kind of systemic shock because it has jettisoned its traditional buffer in the reserve requirement. 

So what does any of this have to do with the Ukraine and Russia? We have shown the single minded unstableness of the Fed. Now for the double mindedness…

The United States and its parasitic host, The Federal Reserve, has been able to benefit the US and the owners of the Federal Reserve because of the hegemony that the US possesses as the controller of the world’s reserve currency. Until recently, all oil transactions had to be done in the US Dollar. That always created a demand for the Greenback and kept its purchasing power high. Officially, the dollar (US Treasuries) is touted to be backed by the ‘full faith and credit’ of the US Government. In reality, it is backed by the US military.

In a 2018 opinion piece in The New York Times Paul Krugman (2008 winner of a Nobel prize in Economics) said…’fiat currencies have underlying value because men with guns say they do.’… 

And guns are what are used when a country has tried to trade in currency ‘other than dollar’. Examples of when countries attempted to trade oil in something else than US Dollars have ended badly for those now poor and dead participants. Please reference the Iraq War of the early 2000’s. According to Bart Gruzalski at counterpunch.org …’Saddam Hussein was about to begin selling oil using the EU currency, not the US dollar. This would have weakened the value of the dollar and undermined the US economy. That is the unpublicized reason for the elimination of Saddam Hussein.’… Later in the same article Ron Paul is quoted with a similar sentiment.

A more recent example of retribution for rebelling against Dollar hegemony is the story of Qaddafi’s Libya. According to Ellen Brown at The Ecologist …’Libya’s Qadhafi (African Union 2009 Chair) conceived and financed a plan to unify the sovereign States of Africa with one gold currency (United States of Africa). In 2004, a pan-African Parliament (53 nations) laid plans for the African Economic Community – with a single gold currency by 2023.

“African oil-producing nations were planning to abandon the petro-dollar, and demand gold payment for oil/gas.”…

…’Qaddafi had done more than organize an African monetary coup. He had demonstrated that financial independence could be achieved. His greatest infrastructure project, the Great Man-made River, was turning arid regions into a breadbasket for Libya; and the $33 billion project was being funded interest-free without foreign debt, through Libya’s own state-owned bank.

That could explain why this critical piece of infrastructure was destroyed in 2011. NATO not only bombed the pipeline but finished off the project by bombing the factory producing the pipes necessary to repair it.’…

So you see, Libya, under Qaddafi , had created economic freedom for their country by foregoing the US Dollar for the safe, stable and dependable haven of GOLD. And after that incredible achievement Libya was invaded and Qaddafi met his end and was dragged through the streets of his hometown, a sight that the premiere of Russia apparently never forgot. ……more here

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